Toronto stock market makes gains on US budget talks, commodities mixed
Posted Dec 18, 2012 11:42 am.
This article is more than 5 years old.
TORONTO – North American markets were higher near midday as traders gained confidence that U.S. political leaders are moving closer to a deal that would steer clear of the “fiscal cliff.”
The S&P/TSX composite index rose 64 points to 12,345.35, while the TSX Venture Exchange ticked back 1.33 points to 1,183.66.
The Canadian dollar was down 0.1 of a cent to 101.56 cents US.
House Speaker John Boehner told reporters Tuesday that he remains hopeful that a fiscal cliff compromise can be reached but, says President Barack Obama has yet to offer a balanced deficit-cutting plan. Boehner said that Obama’s latest offer is for $1.3 trillion in tax increases over the next decade with $850 billion in spending cuts is not balanced enough.
But Boehner’s plan also faces opposition from other quarters. Senate Majority Leader Harry Reid says the Boehner plan can’t pass the Democratic-run Senate.
If congressional Republicans, Democrats and the White House can’t reach a deal by Jan. 1, tax cuts enacted a decade ago for all Americans will expire and government programs will be cut across the board. The combination could lead to a U.S. recession that could spread to other economies of the world.
But traders still seem confident a deal can be etched out.
On Wall Street, the Dow Jones industrials gained 90.64 points to 13,326.03 and the Nasdaq rose 31.09 points to 3,041.69. The S&P 500 index was up 12.47 points at 1,442.83.
Meanwhile, the U.S. current account trade deficit narrowed in the July-September quarter to the smallest level since late 2010, but the improvement may not last.
The U.S. Commerce Department said the deficit fell to $107.5 billion in the third quarter, down nine per cent from the second quarter imbalance of $118.1 billion. It was the lowest trade gap since the final three months of 2010.
In commodities, oil prices trekked higher as the January crude contract on the New York Mercantile Exchange rose 89 cents to US$88.09 a barrel. The TSX energy sector gained 1.1 per cent with EnCana Corp. (TSX:ECA) gaining 41 cents to $20.17.
Gold stocks dropped 0.2 per cent, while February gold bullion moved down $4.90 to US$1,693.30 an ounce. March copper rose 0.3 of a cent to US$3.67 a pound.
Air Canada (TSX:AC.B) unveiled plans to launch its new low-cost airline, Rouge, on July 1. The carrier will focus on leisure destinations in the United States and Caribbean and some routes in Europe. Shares of the company rose four cents to $1.74.
Heroux-Devtek (TSX:HRX) shareholders have approved a $160-million special distribution resulting from the sale in August of its industrial and aerostructure operations to focus on its landing-gear business. Its shares increased eight cents to $12.67.
In Europe, the FTSE 100 index of leading British shares was up 0.6 per cent at 5,946 while Germany’s DAX rose 0.7 per cent to 7,657. The CAC-40 in France rose 0.3 per cent to 3,650.
In Asia, Tokyo’s Nikkei 225 rose 1 per cent to 9,923.01, adding to the previous session’s 0.9 per cent gain. China’s benchmark Shanghai Composite Index was up 0.1 per cent to 2,162.46 while Hong Kong’s Hang Seng fell 0.1 per cent to 22,494.73.
